A new report shows environmental water transactions are happening more and more in the U.S., particularly short-term deals that allow irrigators to conserve or forgo water use for short periods of time.

Use it or lose it. Historically, that was the prevailing understanding amongst water rights holders throughout the Western United States. Farmers, ranchers and other water right holders had to use all of their allocation or risk forfeiting their rights, which could endanger their operations in the future should they run into a dry year. Thus, there was no incentive or even ability in some cases to leave water instream for recreation, fish populations, ecological restoration, or other positive environmental uses. However, over the last 30 years, state laws have relaxed to allow voluntary transfers of water for environmental uses (also known as environmental water transactions) without risking the farm.

A new report released today by Stanford’s Water in the West program takes a detailed look at these transactions in five states in the Colorado River Basin: Arizona, Colorado, New Mexico, Utah and Wyoming. A previous study showed that Colorado River Basin states lag behind some other western states in laws that facilitate changing water rights to environmental uses for extended periods of time. The new report shows that irrigators and conservation groups are using short term deals that require no administrative participation by the state.

“What was most surprising is how many short-term deals set up by water right holders and conservation groups were happening in the Basin,” said Leon Szeptycki, Executive Director of Water in the West and lead author on the report. “These deals don’t involve a formal change in water right but they nonetheless accomplish the goal of conserving water and leaving more instream.”

While they don’t legally protect water instream, flexible approaches, such as split-season leases where water right holders agree not to irrigate during the latter part of the growing season, enhance local water security and farming and ranching flexibility, while benefiting the environment with more water for fish, aquatic habitat, and recreation.

The most notable program for informal water transactions was the System Conservation Pilot Program (SCPP). Ending this year after a four-year operation period, the program was designed to test the feasibility of enhancing conservation and water security by compensating ranchers and farmers for reducing their water use. Improving instream flow for the environment turned out to be a positive co-benefit and helped Wyoming have the highest number of transactions out of the five states researched with 47 from 2014 to 2018. Conservation organizations such as Trout Unlimited and The Nature Conservancy helped facilitate many of these transactions and worked with landowners to develop eligible projects.

“What we found is that transactions in the Basin are increasing and it seems mostly due to increased funding through programs like SCPP,” said Szeptycki. “There’s also a greater willingness on the part of landowners to experiment with short term options that don’t commit them to these decisions in the longer term.”

The work follows a previous report which analyzed the laws and policies regarding formal transfers of water rights to environmental uses in Colorado River Basin states and compared them, along with Oregon, considered a policy leader in this field. That report showed that the Colorado River Basin states were lagging behind those in the Columbia River Basin which had more developed mechanisms and policies for transferring water to the environment.

“There’s a natural connection between water conservation, water security and stream flow,” said David Pilz, Director at AMP Insights and co-author on the report. “Embracing flexible and creative approaches to increasing flow instream is potentially a win-win-win.”

This report is part of a series undertaken by Stanford’s Water in the West Program in collaboration with AMP Insights and other experts and was funded by the Walton Family Foundation. More on this series can be found here.

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In delivering his second Inaugural Address today, Arizona Governor Doug Ducey told the audience at the State Capitol that the time has come to “press forward on some of the biggest challenges facing us.”

“Because none of us came here to do little things — we came here to do the things that matter, big things — and we can do them together.”

Among those big things the Governor identified was securing the State’s water future. Specifically, Governor Ducey called on lawmakers and stakeholders to take action on protecting the State’s Colorado River water supplies.

“We cannot kick the can any further,” he said.

Governor Ducey’s comments on Arizona water security, in full:

Our duty is to leave this state in far better shape than we found it — and we are well on our way.

As predecessors before them, Renewable Water Resources spokesmen on Thursday outlined plans for a 22,000-acre-foot water export project stemming from the northern San Luis Valley to customers in the south metro Denver area.

“This will be a win-win,” Sean Tonner told the Rio Grande Water Conservation District (RGWCD) board during a special meeting Thursday morning.

Tonner is a managing partner with Renewable Water Resources (RWR), a Colorado company with support from former Governor Bill Owens (for whom Tonner worked as deputy chief of staff when he was governor), former State Senator Greg Brophy, Greg Kolomitz and others. Tonner said he purchased the former Gary Boyce holdings encompassing 11,500 acres in the northern part of the Valley. Boyce, who died of cancer in 2016, had proposed a similar water export project.

Accompanying Tonner were RWR attorney Kevin Kinnear and Jerry Berry, who manages the RWR property and has been farming in the northern part of the Valley since 1996. Berry said he has been part of the Moffat community most of his life, serving on the school board there and on the RGWCD Sub-district #4 board.

Tonner said RWR wants to partner with the water district in identifying the best sources of water to provide the one-for-one replacement for the 22,000-acre-foot export while meeting the water district’s goals of reducing irrigated acreage and bringing balance to the hydrology of the Valley. The project would budget $60 million for that water acquisition.

Tonner said RWR estimates water could be purchased at about $2,000 an acre foot, depending on the water rights. RWR will be purchasing both surface water and groundwater, he said.

Berry said there are local residents interested in selling their water.

RGWCD Board Member Peggy Godfrey added she would not be surprised that there were people in the northern part of the Valley willing to sell their water, because they have not been able to use it to the full extent they should have been able to, and what RWR could offer them might help them afford to continue doing what they love to do.

Tonner said RWR would rather work with the water district than have an adversarial relationship. He said this project would return “one for one plus”, making up for the 22,000 acre feet that would be exported, “plus” for a total of 30,000-35,000 acre feet. In addition, RWR would set up a $50 million community fund…

Water would be piped from the Valley, with the buyers footing the bill for that pipeline, Tonner said. He added that RWR was requiring the buyers to limit the size of the pipe to no more capacity than the 22,000 acre feet.

He said currently the estimated cost of building the pipeline is $550-600 million.

RGWCD Board President Greg Higel said he doubted that Aurora and Castle Rock would want to build a pipeline just for 22,000 acre feet of water, and if it were constructed for more water, “that’s the beginning of the end.”

Tonner said the partners have been clear about the pipeline restrictions and the sellers are fine with it.

“Honestly, that’s hard for me to believe,” Higel said.

RGWCD Board Member Cory Off, who extensively questioned the RWR representatives, asked how long it would take to capitalize a project of this magnitude, and Tonner said “roughly five years.”

Regarding the project timeline, Tonner estimated close to 10 years “start to finish.”

Tonner said partners have been working on this proposal for about four years and hope to file something in water court in 2019 but would be fine with it taking longer if necessary. He said those involved have been working with individuals on both sides of the hill — potential waters sellers in the San Luis Valley and potential water buyers in the Denver metro area.

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Every March, thousands of Sandhill cranes stop in #GreatSandDunes National Park & Preserve on their way to their northern breeding grounds. The fields and wetlands of #Colorado’s San Luis Valley provide excellent habitat for these majestic #birds. With the dunes and mountains nearby, they dance and call to each other. It’s one of nature’s great spectacles. Photo @greatsanddunesnps by #NationalPark Service.